Today’s REI Classroom Lesson

Larry Goins shares how to start with a small IRA and grow it fast. These non-conventional strategies provide the opportunity to grow your IRA quickly.

REI Classroom Summary

From assignments to partnering up, there’s multiple ways to use the funds from your IRA to turn it into a large profit. Listen in as Larry explains more.

Listen to this REI Classroom Lesson

Real Estate Investing Classroom Show Transcripts:

Mike: Welcome back to the flipnerd.com REI Classroom, where experts from across the real estate investing industry teach you quick lessons to take your business to the next level. And now, let’s meet today’s expert host.

Larry: Hey, this is Larry Goins, today’s trainer on REI Classroom. I’m really excited today because what I’m going to share with you is something of a lot of people have asked me, how to start out with a very small retirement account and grow it to a large retirement account.
Mike: This REI Classroom real estate lesson is sponsored by theinvestormachine.com, FlipNerd’s private investor coaching program and your blueprint to investing success.
Larry: Okay. We all know a lot of people starting out in real estate, you don’t have a whole lot of money to work with, but you want to be able to invest with tax advantage accounts like a Roth IRA, a traditional IRA or whatever. So what I want to talk to you about today is a few different ways that you can start with a very small amount and grow it to a large amount so then you can start investing it, okay?
So the very first thing I want to talk about is doing assignments. Now, this is what you would do in wholesaling. You could literally open up a self-directed retirement account, add a custodian, and put in $100 and go out and find a property that you could get under contract for, say, $40,000, all right? Maybe you’re going to even put up a $10 deposit. Just $10 deposit, okay? And then what you’re going to do is you’re going to make that contract, then your name and/or assign. So, is really not your name is going to be your retirement account name and/or assign, okay?
Then you’re going to find a buyer that will buy that property from you for $50,000. All you’re going to really do is assign this contract. You literally turned a $10 investment into $10,000 because when you assign the contract, you get paid at the closing. I should say your retirement account gets paid at the closing, okay? So that’s one quick way to start with a very, very, very small amount.
The second way is you could do the exact same thing, but use options. An option gives you the right, but not the obligation to buy a property, okay? So you get an option on a property for $40,000 then you go out and find somebody that will buy the property for $50,000. Then you exercise your option and sell it to your buyer, okay? Same type of thing.
The third thing you can do, a lot of people now are using hard money lending to fund their fix and flip properties. You can be a hard money lender. You go out you find somebody that has money and would like to get into hard money lending and then what you do is, you have them put up the money, let’s say you’re going to do a $50,000 loan, okay? For somebody. They’re going to put up the $50,000, okay?
Maybe they’re going to put up $49,900. You’re going to put up $100. But in your agreement, let’s say the terms are 15% and 10 points, okay? 15% interest and 10 points. Well, you’re going to make the agreement with the person who puts up the money. They’re going to get the 15% return, but you are going to get the 10 points. So, you put up a $100, 10 points of 50,000 is $5,000. And then they get the interest on the loan. That’s the third way you could do it.
The next way you can do it is you can buy lots. You can buy cheap infield lots for two, three, four, $500, turn around and sell them on e-bay or Craigslist for two, three, four, five, $10,000. You can also partner with people, you can partner where they put up the money you go out and find the deal and then you split the profits. You could also borrow money, you could borrow even 100% of the deal. You could even do this with rental properties, or lease option or seller finance properties or wholesale or fix and flip. So that’s a lot of ways right there. You could start with a very small amount of money and grow it into a large amount of money in your self-directed retirement account.
So my name is Larry Goins, today’s REI Classroom author/trainer. And if you’d like a free copy of my latest book, “HUD Homes Half Off,” just go to freehudbook.com. See you next time.
Mike: Are you looking to change your life through real estate investing? If you’re interested in either getting started or taking your business to the next level, please check out FlipNerd’s private program at theinvestormachine.com. This is the most robust real estate investor coaching, networking and mastermind on the planet, and designed for your success.
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Larry Goins is an author, trainer and national speaker. He has written several books on real estate investing that are available wherever books are sold. He is making his latest book, HUD Homes Half Off!, available for free for a limited time at FreeHUDBook.com.